Don’t be shocked, but electric utility rates are on the rise — just not has much as previously believed.
Chief finance officer Doug Leahy briefed Penticton council with an analysis of Fortis BC rate increases approved by the B.C. Utilities Commission in 2011 and how they compare to the city’s rates.
Fortis has increased electric rates by a total of 11.5 per cent in 2011, which was broken down in installments: Jan. 1 saw a 6.6 per cent increase, May 1 had a 2.5 per cent boost, with another 2.4 per cent hike June 1.
The increases are comprised of three components: revenue requirements (9.1 per cent), cost-of-service analysis (one per cent) and flow-through power purchase from B.C. Hydro (1.4 per cent).
Leahy explained that the BC Hydro rate increase was originally projected to be 16 per cent, but the provincial government stepped in after reviewing the operating and capital budgets of the Crown corporation.
The B.C. government has capped the power rate increase at eight per cent, which has yet to be approved by the BCUC. Fortis purchases approximately 20 per cent of its power from Hydro, and the through rate passed onto Fortis will be approximately 1.6 per cent.
City of Penticton electric utility increases were 5.8 per cent on Feb. 1 and 5.3 per cent on May 1. District of Summerland increases were listed as 6.6 per cent on Jan. 1 and five per cent on April 1.
Fortis has also indicated that the city’s electric purchases will be increased by four per cent in the coming year, including a 1.5-per-cent revenue requirement and a rate balancing increase of 2.5 per cent.
Increases for 2013 and 2014 are projected to be 13 and 10 per cent, respectively.
“It’s not fantastic news,” Leahy said. “These are still significant numbers. We hope over time those numbers will move downwards.”
